Choppy waters may lie ahead but investors still have confidence in the Premier League

Private equity continues to look towards Europe after being shut out of US sport

The differences between European football and the major sporting leagues in North America are many.

From US sport being built from the foundation of collegiate sports, where university games can attract 100,000-plus attendances, to salary caps, to the closed nature of the ecosystem due to the absence of promotion and relegation, the two operate within the confines of a very different set of rules.

But, while investment into US sport has been heavy and sustained, with valuations rising exponentially over the past decade or so, buoyed by the security of long and lucrative media deals, the resilience of the sport amid challenging macroeconomic conditions, and the existence of cost control, it has been done so via super-wealthy individuals and family offices, with private equity not yet allowed to participate, at least in taking a majority position, as yet.

With US franchises still owned by families, investors have found more opportunities in European football

In some leagues, such as the NFL, PE and investment funds can’t put any money to work as yet, although that will be a position that almost certainly changes in the coming years as more and more liquidity will be needed to purchase these assets, some of which are valued at close on $10bn already.

European football offers much more freedom to investors, with no barriers standing in the way of PE funds making an investment play. But given the lack of cost control, the existence of promotion and relegation and the wild west that is the transfer market, means that the opportunities for value creation aren’t equal across leagues, with huge differentials in terms of the value of media rights across Europe’s ‘big five’ leagues of England, Spain, Italy, Germany and France.